Apprenticeship Levy Essentials

Who Pays the Levy?

The Apprenticeship Levy is applicable to employers across all sectors with an annual pay bill exceeding £3 million. These employers can utilise their levy contributions to access degree apprenticeships offered by higher education institutions.

Funding for Non-Levy Paying Employers

Employers not subject to the levy can receive up to 95% funding assistance for apprenticeship costs. This assistance is available for higher and degree apprenticeships for individuals aged 18 or older, with no upper age limit and no cost to the apprentice. Additionally, current staff members can benefit from apprenticeships to support their career development.

Levy Key Facts

1. Levy Rate: The Apprenticeship Levy rate is set at 0.5% of an employer's total UK payroll and is collected via the PAYE (Pay As You Earn) system. This entails a deduction from your monthly payroll, which is then remitted to HM Revenue and Customs (HMRC).
2. Ring-Fenced Funds: The funds collected through the Levy payments are securely held in a digital account known as the "Apprenticeship Service" account. Employers can access this account to cover the expenses of apprenticeship training and assessments.
3. Government Contribution: The government supplements your Apprenticeship Service account with a 10% contribution. For every pound you deposit into the account, the government adds 10 pence, effectively increasing the available funds for apprenticeship training.
4. Utilisation Period: It's crucial to note that Levy funds must be expended within 24 months on a rolling basis. Any unused funds within this timeframe will expire, underscoring the importance of effective fund allocation and planning.
5. Exclusivity for Apprenticeships: Levy funding is exclusively earmarked for apprenticeship training and assessments. It cannot be allocated to other training or educational expenses unrelated to apprenticeships.

Benefits for Employers Investing in Apprenticeships

By embracing apprenticeships through the Levy, employers can realise several advantages, including:

• Talent Pipeline: The ability to establish a talent pipeline where organisational values and behaviours can be instilled from the outset of an individual's career.
• Skills Development for Current Staff: Providing existing staff members with opportunities to enhance their skills and attain qualifications.
• Enhanced Opportunities for Young Individuals: Improved prospects for young people to enter the workforce and gain valuable skills.
• Diverse Workforce: Attracting and retaining individuals from diverse backgrounds, contributing to a more inclusive and dynamic workplace.

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